Title
Consider and take action on a resolution adopting the City of League City Capital Recovery Fee (CRF) Deferral Policy (Executive Director of Development Services)
Background:
Capital Recovery Fees (CRFs) are assessed on new development to recover the cost of providing roadway, water, and wastewater infrastructure capacity needed to serve growth. Currently, CRFs are assessed at the time of final plat and paid at the time of permitting for both residential and commercial developments.
Texas Local Government Code Chapter 395 authorizes municipalities to establish payment agreements for impact fees, provided the full amount of the fees is ultimately paid. Over the past several years, Staff has encountered commercial development projects where upfront CRF payment requirements create cash-flow challenges that delay or discourage otherwise high-quality development.
The proposed Capital Recovery Fee Deferral Policy allows qualifying commercial projects to defer CRF payment from permitting to Certificate of Occupancy, with full repayment over a set timeframe. This does not change when CRFs are assessed. All applicable CRFs will continue to be fully assessed at the time of final plat. For qualifying commercial projects, payment of the CRFs may be deferred until issuance of a Certificate of Occupancy (CO) or Temporary Certificate of Occupancy (TCO), subject to the terms and conditions of the policy.
The policy creates two distinct qualification pathways:
· Pathway A: Administrative Deferral Track, intended for high-quality commercial projects with total CRFs of $200,000 or less; and
· Pathway B: Economic Development Track, intended for larger economic development projects that meet the thresholds of the City’s Economic Development Investment Policy and may be paired with Chapter 380 incentives.
Key protections for the City include:
· 110% financial security required at CO/TCO
· “But for” justification demonstrating deferral necessity
· Annual program caps ($1M...
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